China’s Policy of Influence-Seeking in Europe

Russia is not the only country strongly seeking to influence liberal democracies. A new report from the Global Public Policy Institute (GPPi) and the Mercator Institute for China Studies (MERICS) warns that China is increasingly pursuing a policy of influence seeking. The Communist Party of China is intensifying its efforts to influence European states for political and economic reasons, and also in order to promote its own authoritarian political model. We talked to Kristin Shi-Kupfer, co-author of the report, about increasing Chinese influence, the country’s goals, and what Europe’s response should be. This interview first appeared in the Green European Journal.

Roderick Kefferpütz: After the Cold War, the “end of history” was proclaimed – the liberal democratic model had won the day and no alternative was present. Is this still the case, or are we currently in competition with China over socio-political models?

Kristin Shi-Kupfer: We can certainly see that liberal democracies are in crisis. This can be very clearly observed in the core countries of this societal model: the US and parts of Europe. These countries are being challenged to re-explain themselves, to offer a new perspective. Due to this crisis in the West, the Chinese system and its developmental path are, of course, subject to greater attention. At the last party congress, the Chinese leadership itself under Xi Jinping hinted that the Chinese path to development could be superior to that of the West. Beijing also actively promotes this alternative developmental path through investments and involvement in developing countries, with little regard for good governance principles such as the rule of law and transparency.

Foreign powers have increasing influence within liberal democracies; all eyes are on Russia in particular. Your report paints China as an undervalued player in influence terms. How so?

Russian influence-seeking policy is relatively easy to grasp. It is rather destructive in its approach and has the aim of infiltrating and subverting democracies. The Chinese approach is much more long-term and subtle. It’s not just about infiltration or disinformation, as is the case with Russia’s influence policy. China uses a range of open and hidden channels. They offer investments, conclude cooperation agreements, build networks, and organise joint conferences with think tanks. It’s a very subtle way of networking. But this network can then also be mobilised when it comes to its own interests.

A cynic would say that the Europeans also do this.  

Yes, that’s a very important point. But the question of the difference between legitimate public diplomacy and illegitimate influence is not the primary issue. The crucial difference is the political system. In China, there is no pluralistic competition and no transparency. National interests are, in principle, party interests. China has a different political system that generates completely different processes and interests. Therefore, any action by the Chinese state towards Europe is potentially problematic and needs to be closely scrutinised.

What are these Chinese networks used for? What are Chinese interests as far as Europe is concerned?

There are different levels. First, there are clear economic interests, for instance gaining access to technology by buying into high-tech companies, or by creating new markets such as the Belt and Road Initiative. There are also political interests. When it comes to the South China Sea or human rights issues, it is certainly useful for China if there are actors within Europe who support the Chinese position. And, of course, disrupting European unity is also a goal. On the one hand Europe is a necessary counterbalance to the US; on the other, from a Chinese viewpoint it is less than desirable to deal with a united Europe speaking with one voice.

Finally, it is also a matter of increasing legitimacy for the Chinese system and its developmental path. International collaboration and interdependence bring recognition and increased cooperation. This in turn has an effect within China itself.

Are there any EU member states that are particularly susceptible to Chinese influence?

In the study, we felt that it was important to emphasise that the whole of Europe is affected. Due to their size and economic strength, countries such as Germany and France are less susceptible than southern or eastern European countries, but we do warn against a certain western European complacency. China also invests in western Europe and tries to influence public opinion in these countries.

Eastern and southern European countries are certainly more vulnerable, however, because of their much weaker position. They are more dependent on economic cooperation and investment and have fewer opportunities to speak directly to, and on an equal footing with, China. It is for this reason that the eastern European member states are so enthusiastic about the 16 + 1 mechanism: it offers them the opportunity of direct, face-to-face communication with the Chinese authorities.

However, it must also be said that these countries, such as Hungary for example, at least partly sympathise with authoritarian tendencies within their own countries. For this reason, it may be easier for them to cooperate with China.

You describe the subtle nature of China’s current influence-seeking policy. How might this evolve in the future?

In our report, we use Australia as a blueprint to show the direction this could take. Up to 80 percent of foreign donations to Australian political parties come from China. Numerous politicians work for Chinese companies after their political careers have ended, and the Australian intelligence service has identified ten regional and local politicians who allegedly have close ties to the Chinese secret service. Chinese influence runs deep within the political elite. Even in the media, certain decision-making processes may well have been deliberately influenced using financial means.

We don’t yet see this in Europe, but it could happen here too. This is what we are warning against. This is why we want to draw attention to Chinese political influencing efforts. We advocate for appropriate disclosure requirements for political parties – or simply for banning certain types of political donations.

What further recommendations do you make, especially with regard to investment policy?

There has already been some movement in this area. France, Italy, and Germany are pushing for a European investment screening mechanism to better control foreign investment in critical strategic areas, for example in power supply or in companies with key technologies. We go one step further, however, and say that the definitions of these critical areas should be broadened. It is important, for example, that the media and academia are included. At the same time, our societies must avoid exposing research and media institutions to such commercial pressures that they forced to rely on third-party funding, including Chinese money.

To what extent does digitalisation offer new opportunities for gaining influence? Europe is always looking in the USA’s direction and criticising Apple, Facebook, and Google, while in the East the tech titans Tencent, Alibaba, and Baidu are striding ahead. Will they not eventually arrive on the European market and potentially present us with challenges?

This has already begun. Wechat and Alipay offer cashless payment methods in Germany and other European countries – German drugstore chain Rossmann offers Alipay for Chinese tourists in Germany, and Huawei wants to participate in the 5G expansion in Europe. Chinese digital companies are already on the rise in Europe, and this also has significance for data flows. Europe has been asleep at the wheel for too long; the fact that we have so few digital players in Europe, for instance, is problematic.

Of course, the new EU Data Protection Regulation will set certain limits. Adjustments are also being made on the Chinese side in order to secure these transnational data streams – for instance, we are seeing the adaptation of Chinese standards to conform at least partially to European data standards.

Europe should stand up for its values and interests when dealing with China. Europe needs more self-confidence – then it will gain more respect. Otherwise other countries will think of Europe as a pushover.

Liberal Democracy’s War With Itself 

In many countries, authoritarian populism is on the rise and liberal democracy is in decline. Citizens are turning away from their political systems and increasingly heeding the siren song of the populists. In his new book, The People vs. Democracy: Why Our Freedom Is in Danger & How to Save It, Yascha Mounk analyses the reasons behind these developments and the key challenges posed to liberal democracy in our time. This interview first appeared in the Green European Journal.

Roderick Kefferpütz: In your latest book you describe the demise of liberal democracy and how liberalism and democracy are actually at war with each other. Can you explain that?

Yascha Mounk: I believe that liberalism and democracy are two fundamental elements that go together; in some ways they need each other. But my fear is that they are falling apart, creating two malformed systems. On the one hand we have ‘rights without democracy’: political systems that are strong on individual rights, with independent institutions and a very effective separation of powers, but which are insufficiently responsive to the popular will and actually pursue policies contrary to this.

And on the other, partly in reaction to this, we are seeing the emergence of political systems in which populist politicians claim that they alone represent the popular will, in which minorities are victimised, and independent institutions such as courts are undermined. Here we have ‘democracy without rights’.

Liberal democracy means maintaining individual rights while also being able to respond to the popular will. The question at the heart of the challenge we are currently facing is how to maintain this balance.

What are the reasons behind this?

It’s partially a product of elite capture. Over the years we have seen money becoming increasingly important in politics, and the development of a revolving door between lobbying and legislating. Special interests have become too powerful, and politicians have become too disconnected from ordinary citizens.

This disconnection is, in part, a consequence of the way we deal with the numerous challenges we face. Just think about climate change. To tackle this issue, you obviously need cooperation between hundreds of countries around the world; you need international agreements and international institutions. But this takes a lot of decisions out of the hands of ordinary people.

The result is that people feel alienated because their interests aren’t being taken into account. And then come the populists who want to abolish institutions such as central banks, international organisations, trade treaties, and so on.

That’s what elections are for, so that citizens can make their views heard.

Sure, and they can elect politicians who are more responsive to their views. The issue, however, is that the challenges we are facing are so complex that we need expertise in decision-making and cooperation between multiple stakeholders on an international level. But at the same time, this level is too far removed from ordinary people.

The author Parag Khanna argues that there is actually too much democracy and that in fact what we need is more experts and technocracy.

This is what I call the ‘technocratic dilemma’. Parag Khanna is partially right. The world has become much more complicated and therefore we need expertise and technical institutions. There are certainly some areas in which a more technocratic approach might lead to better results, but there are many others in which technocracy is delivering poor results. Why? Because the actors involved, expert as they may be, do not necessarily have the interests of ordinary people at heart. This means that the people’s views are not taken into consideration when public policy is shaped, breaking the core promise of our political system — to respond to the popular will. People won’t stand for that for too long.

We’re now finding ourselves in a situation in which people have also changed their views on certain issues. That’s one of the points in your book, that people have become less liberal.

Yes, that’s part of both the rise and the danger of a democracy without rights. If you want to uphold the democratic and the liberal elements of the political system then a majority of people have to vote for liberal rights. Otherwise you can’t solve the riddle. The fact is that the views of a lot of people in Europe have become less tolerant. Let’s take Switzerland as an example. When the majority of the Swiss people vote to ban the construction of minarets on mosques, then you are forced to either violate the liberal element of our political system, which is the right to worship, or the democratic element, which keeps the system responsive to what people want.

The only way to solve this problem is to convince a majority of the electorate to actually embrace and vote for liberal policies.

But how does this work for forced migration, for example? In his latest book, Ivan Krastev argues that the refugee movement is the biggest existential threat faced by the EU.

I wouldn’t necessarily say it’s the biggest. There are too many to choose from. But I agree that Europe needs to develop a clear vision of the nature of its refugee system. It needs to show that it’s in control of the process. The public would feel more comfortable knowing there’s a system in place that works.

We have both a humanitarian commitment and the responsibility to reassure citizens that there is an orderly, functioning process in operation. That’s the challenge. If politicians give their citizens the impression that there’s an open door and that no-one is controlling who comes into their country, then this will also put pressure on liberal attitudes within the EU.

But how do you convince voters to vote for liberal policies? Is it a question of leadership, or of arguments, or of an emotional connection?

It’s a question of leadership, and of policy. The gap between politicians and ordinary citizens is too wide, and their policies are failing to deliver in key areas such as the aspiration for a better material future. During the Cold War period, living standards increased rapidly. Now we find ourselves in a situation in which that type of material future can no longer be guaranteed.

Emmanuel Macron is one of the few politicians who has put forth an optimistic vision for his country. This has allowed him to persuade people — to some extent at least — that politicians can actually deliver for them. You can only fight populism with an optimistic vision of how the future is going to be better. If all you can offer is the status quo, or if voters remain pessimistic, then you aren’t going to win. Whether or not Macron is actually going to deliver on some of his promises, however, is a different question.

In Hungary and Poland we see the rise of illiberal democracies, and institutions such as the European Commission are struggling to rein this in. How does your answer work there?

If illiberal actions are without consequence, the populists will just carry on. If Europe wants to be an example to the world and uphold liberal democracy, it needs to make it very clear that Hungary cannot remain a member of the EU if it maintains its current government. At present, Hungary would never meet the criteria for EU membership. So why is there no attempt to suspend its membership, or to limit the generous payments it gets from the EU? Most shameful of all is how Chancellor Angela Merkel, a member of the European People’s Party alongside Hungarian Prime Minister Viktor Orbán, has remained silent on Orbán’s openly anti-semitic campaign.

Orbán cites Putin as a role model, and we see how liberal democracy is increasingly coming under pressure from outside actors such as Russia. How can we defend liberal democracy in the world? Do we need to reconsider John McCain’s proposal of an international ‘League of Democratic States’?

The problem with the League of Democratic States is that it’s impossible to say how many countries would be left in 50 years’ time.

What’s clear is that liberal democratic countries and governments need to be much more willing to fight for their values and to develop long-term strategies. Take Germany, for example. In response to the Skripal poisoning in the United Kingdom, the Germans joined the UK and others in expelling Russian diplomats. A couple of days later, however, they approved the construction of the Nord Stream 2 gas pipeline, which will make Western Europe even more dependent on Russian gas for many decades to come. This will allow Putin to continue to bully Russia’s Western neighbours. Germany effectively kicked out a few diplomats but helped the Russian regime to build its geopolitical dominance. That’s not a coherent strategy.

This interview was published in the Green European Journal —

Car Wars: The Future of Europe’s Car Industry

The automotive industry is experiencing the biggest disruption in its history. The car will undergo more changes in the next 10 years than it has over the last 10 decades put together. Several trends are pushing forward this massive transformation, accompanied by the emergence of new companies and competitors. Europe’s automotive industry urgently needs to address these challenges if it wants to stay successful.

This article was first published with the Green European Journal.

Europe is the cradle of the car industry. The first automobile, invented in Europe around 130 years ago, was a niche product. Few understood its broader implications. As Germany’s last Kaiser Wilhelm II infamously quipped, “The automobile is only a temporary phenomenon. I believe in the horse”.

Since then, Europe has put the world on wheels. Its cars and automotive technologies are sold and used all over the globe. Europe’s automotive industry has grown and flourished, becoming an essential part of the continent’s industrial fabric, providing millions of jobs, contributing substantially to GDP, creating value and moving people and goods. Overall, it’s an economic success story.

But as founder of tech giant Intel Andy Grove noted, success breeds complacency and complacency breeds failure.

And failure is looming. Emissions-cheating scandals have seriously damaged the industry’s reputation and finances. What’s more, they have highlighted a smug disregard when it comes to eco-innovation. Cheating rather than beating environmental standards is not a sustainable strategy. This lack of innovation and future-oriented approach is endangering Europe’s car industry.

A perfect storm is brewing in the automotive world. The car is practically being reinvented. And Europe’s automotive industry is failing to keep pace.

The car of the future is sustainable, smart and shared, and each of these characteristics brings both new challenges and new challengers.

The first is climate change. The automotive sector is a major contributor to greenhouse gas emissions. The transport sector is responsible for roughly 22 per cent of overall emissions in the European Union. And while the EU was able to cut its emissions by 23 per cent since 1990, the emissions in the transport sector actually grew by 20 per cent during this timeframe. If the EU wants to achieve its climate targets, every sector must play its role, including the car industry. This is a matter of climate stability, but it is also an economic matter.

Sustainability is becoming a market factor. An increasing number of countries are introducing new regulations and frameworks limiting fossil fuel powered combustion engines and promoting electric cars. France and the UK have put forward a ban on combustion engines by 2040, Norway has plans to have all new cars be zero-emission by 2025, Austria, Denmark, Ireland, the Netherlands, Portugal and Spain all have set official targets for electric car sales and even the world’s largest car market, China, has put in place quotas for electric vehicles and is considering a similar end date to France and the UK. In addition a number of cities such as Paris and Copenhagen are planning to ban diesel cars from entering the city centre.

But the market is irreversibly changing in favour of more environmentally friendly cars. If Europe’s automotive industry doesn’t adapt to these changes quickly enough, it will lose out. Those who come too late will be punished by the market. This particular trend towards greater sustainability is also accompanied by advances in battery storage technology. The mileage of electric cars is increasing and the costs are coming down. Questions around the sustainability of their supply chains notwithstanding, electric cars are in the midst of a break-out moment.

The second trend is autonomous driving. Artificial intelligence is giving the car a brain. The car of the future is not only sustainable, it’s also smart. Fitted with sensors, cameras and high-tech electronics, the car is becoming a computer on wheels. Rather than relying on a human driver, cars will drive themselves, reducing traffic deaths, avoiding congestion and freeing up their passengers’ time for other things. In the future, prospective car buyers might be more interested in on-board entertainment systems and other similar features than any other aspect.

And last but not least, the car of the future is becoming connected and shared. Rather than being an isolated, personal transport solution, it is becoming part of a mixed mobility network together with public transport and bicycles. New mobility platforms and business models are emerging, with numerous ride-hailing and car-sharing apps conquering the world of mobility. Instead of selling cars, these new players are selling kilometres. This, too, could be a great challenge to traditional car manufacturers, with the competition only one smartphone-click away.

Cultural and demographic changes are also fuelling this trend. Young people and urban dwellers no longer have a strong desire to own a car, and worry about the availability of parking spaces, insurance, and other inconveniences associated with car ownership. They want instant, on-demand access to mobility solutions. Car-sharing and ride-hailing could therefore also displace car ownership in certain areas, particularly in big cities. It is also a more efficient mobility system, given that the average car is parked 95 per cent of the time and therefore is only in use for the remaining 5 per cent.

In the context of these three transformative developments, international competition in the automotive world is heating up, challenging Europe’s traditionally strong position. Many new competitors have emerged. US-based Tesla, for one, has become a leader in the luxury electric vehicle market, and is now entering the mass market for electric vehicles with the new, more affordable Model 3. Simultaneously, a whole new type of competitor is joining the fray. Traditional car companies may find themselves increasingly side-lined in a ‘parasitic’ relationship with tech titans such as Google, Apple and Baidu: the former provide the basic car structures, while the latter kit them out with the latest design, technology (such as automated driving, voice-assistants like Siri, cloud-based solutions, cyber-protection, etc.) and infotainment systems, therefore getting a greater share of the value-added. Besides the data protection issues that arise when data monopolists enter the car industry, a crucial question actually is whether car companies can manage to diversify their offer into the technology sector rather than vice versa. And last but not least, a whole range of start-ups and service providers with new business models, such as Uber, Lyft and Didi Chuxing, have penetrated the automotive world. These forces could spell veritable ‘carmaggedon’ for some of Europe’s car manufacturers.

Europe is finding itself in a two-front war. In the West, it is facing companies such as Tesla, Google and Uber, which together represent the three trends that are defining the car of the future. Tesla is electrifying the car fleet, Google is working on autonomous cars and Uber, Lyft and others are providing new mobility concepts.

The situation in the East is no different. Chinese tech titans such as Baidu and Alibaba are developing driverless cars. Ride-hailing players such as Didi Chuxing — China’s Uber — are expanding abroad. And China is a market and industry leader in electric mobility. It has witnessed a rapid increase in electric vehicle production capacity, as well as sales. According to McKinsey research, Chinese manufacturers produced 43 per cent of the 873 000 electric vehicles built worldwide in 2016, and the country is home to the largest fleet of electric vehicles. In addition, China is a booming place for start-ups in the automotive sector.

Furthermore, China, South Korea and Japan are leaders in battery technologies and dominate the battery market. China in particular is building up its battery production capacity in order to gain a strategic stranglehold over this key sector. Not having a single battery production plant itself, Europe might come to regret relying on countries such as China for electric car batteries, given that China will increasingly require those batteries for its own electric car production.

It is an open secret that Europe has been asleep at the wheel when it comes to these technological developments. Electric cars have been belittled for too long, and by too many of Europe’s major car companies. According to the European Commission, the Chinese market already features 400 different types of electric vehicles, compared to Europe’s six. There’s a veritable race for low-emissions vehicles and Europe is being forced to play catch-up.

Europe’s policymakers have long been too lax towards the automotive industry. EU emissions targets have been watered down, and regulators have kept regulatory loopholes open and their eyes closed when it comes to emissions cheating, while providing subsidies to the car industry. Thinking that this would protect the car industry and strengthen it against the global competition, in fact the opposite has been the case. Keeping the status quo and lowering ambitions in the midst of a great transformation is never a successful strategy. It is reminiscent of the iPhone moment when Apple’s new smartphone quickly destroyed Nokia’s leadership of the mobile phone market.

Europe’s car companies have incredible know-how, expertise, R&D, and formidable skilled workers. But they need to change gear. And governments need to push them too. The European Commission, for instance, is now energetically working towards a European battery alliance with the aim of building a European battery supply chain for electric vehicles. It should be commended for that. However, more scepticism is warranted when it comes to its newly proposed CO2-emission targets for cars. Under the Commission proposal, which is still to be negotiated with the European Council and European Parliament, new cars would have to reduce their CO2 emissions by 15 per cent on average by 2025, and 30 per cent by 2030 (compared to 2021). These reduction targets are flanked by a crediting system for zero- (electric vehicles or fuel cell vehicles) and low-emissions vehicles (less than 50g CO2 per km, mostly plug-in hybrids). Manufacturers that have a share of zero- and low-emission vehicles that is higher than 15 per cent in 2025 and 30 per cent in 2030 will be rewarded with a less strict CO2 target.

While the car industry has complained that the targets are overly ambitious, a variety of NGOs have criticised them for not being ambitious enough.

The crediting system, which would allow companies to underperform the emissions target depending on the number of their zero-emissions cars, also seems somewhat misplaced. Such a system should act as an incentive for companies to be even more ambitious. But a whole range of European car manufacturers have already announced that they will boost the sale of electric cars. Volvo will electrify its entire vehicle line by 2019, Aston Martin will go completely hybrid by 2025, and BMW too has said that it aims to have 25 per cent EV sales by 2025.

What was supposed to be a reward for ambition is looking more like an emissions target loophole. Where’s the drive in this crediting system? Given these circumstances, and the fact that a number of EU Member States has already announced an end date for fossil fuel-powered cars (France, Netherlands), it is possible that some Member States might want to move ahead of the pack and put forward more ambitious national plans, knowing that ambition is needed to drive this great transformation in the automotive world.

Greens have a lot to gain from the fundamental trends reshaping the car industry. They are recognised as being one of the only political parties with strong credibility on mobility and transport issues. And unlike other political parties, the Greens have not been tainted by the emissions-cheating scandal.

The Greens could make use of this situation to strengthen their position as a credible, respected actor on transport and mobility issues. This does not mean finger wagging in the direction of the car industry, but rather an earnest, pragmatic dialogue. Unlike the socialists and the conservatives, with their strong focuses on jobs and competitiveness respectively, the Greens are in a good position to take a comprehensive view of the issues facing the car industry and their likely impacts, and to engage with the different stakeholders in this industry. The fact that the Greens hold the chair of the European Parliament’s Transport Committee is also helpful in this context.

There has traditionally been some bad blood between the car industry and the Greens. There is, however, little point in continually looking back into the rear-view mirror. Now is the time to discuss the future, and to make the European car industry fit for it. Indeed, this is the approach taken by Germany’s only Green Minister-President — in the state of Baden-Württemberg, home to Daimler, Porsche and Audi — who has launched a strategic dialogue with the automobile industry to discuss the multitude of challenges it faces, and to come up with proposals on how Baden-Württemberg can retain its leadership position in the sector. Participants include car manufacturers and original-equipment manufacturers, energy companies, public transport entities, city representatives and policymakers, academics, trade unions and environmental NGOs.

Europe was the birthplace of the car, but the car isn’t what it used to be. It is being reinvented, and the birth pangs are shaking the European car industry to the core. Greens can play an important role in ensuring the ongoing success of the European car industry by mixing ambition with pragmatism, and idealism with governing experience. They are in the perfect position to integrate emerging models and best practices, to make new alliances, and to strike the right balance to make the car industry more sustainable and simultaneously more competitive for the future.

Trumping Trump: A Gulliver Strategy

Trump is a commercial tycoon turned political typhoon. He’s taken a sledgehammer to the political establishment, steamrolling through the Republican primary and then snatching victory from the jaws of defeat in the US presidential election. Since then, there’s been no break from this dizzying roller-coaster ride. Core foundations and political tenets have been shaken. The transatlantic alliance, NATO’s collective defense, free trade, a free press, rule of law, all have been challenged. It’s been bunker, not beacon America.

Yet, looking beyond the fog of Trump’s tweets, it’s becoming clear that, in spite of Republican control of both houses, his Presidency isn’t going to be all smooth sailing. What seems to be effective in countering Trump is a “Gulliver strategy” – a convergence of many different smaller actors to contain him, as in Jonathan Swift’s novel Gulliver’s Travels. In this classic, the protagonist Gulliver is washed ashore after a shipwreck and awakes to find himself pinned down by a multitude of tiny people, inhabitants of the island country of Lilliput.

What we are seeing is a multitude of smaller actors outside of Washington D.C. restraining Trump. Lawyers, judges, attorneys and citizens all rallied against Trump’s immigration order back in January. At least 44 US states are so far resisting the voter data request from the Trump Commission. And an army of mayors are countering Trump’s withdrawal from the Paris climate accord.

The last in particular is an example of how he can be side-lined. Trump may proclaim that he’s withdrawing the US from the Paris deal, but US climate ambition can continue without him. Just recently, 1.400 US mayors, Republicans and Democrats, pledged to support cities’ adoption of 100 per cent renewable energy by 2035. Governors and US states have also pushed ahead. And they can make a huge impact. According to an analysis by Carbon Brief, these states have enough power to reduce their own emissions to such an extent that the US could still meet the CO2 reduction target committed to under the Paris Agreement.

These actors need strengthening! That means it’s time to dust-off the old city partnerships, build bridges between European regions and American states, and bring different players together. For example, the German region of Baden-Wuerttemberg has together with California launched the Under2MoU climate initiative in 2015. It includes a total of 176 jurisdictions representing 1.2 billion people and Trump’s Paris withdrawal is the perfect opportunity to now bring more US states and cities to join this initiative.

There’s been too much hoping that individuals in the administration like McMaster, Tillerson, Kushner or House and Senate Republicans might have a stabilising, tempering influence on Trump. They don’t. Trump is a one-way train. And as Dietrich Bonhoeffer, the German anti-Nazi dissident and pastor, once said “if you board the wrong train, it is no use running along the corridor in the opposite direction”.

House and Senate Republicans are likely to discontinue their support of Trump once their voter base starts to shrink. But in the meantime, the checks and balances on Trump’s Presidency are the many local and regional actors, the brave men and women doing their jobs working in the media, judiciary, law enforcement, and so many other places.

Russia and Germany’s SPD: Energy ties that bind

Respect! This week the US Senate voted to fortify US sanctions against Russia. The new amendments on the Iran sanctions bill would require the President to seek congressional approval before lifting any of the Russia sanctions. Trump’s elbow room on Russia is closing. This is a big deal. Not only because it was a bipartisan agreement between Republicans and Democrats, but also because Republicans went against the wishes of the US administration.

Additionally, the Senate went even further, expanding the sanction measures against those supplying arms to Syria and those conducting cyberattacks. Most prominently for Europe, the US Senate launched a broadside against Gazprom’s Nord Stream 2 pipeline, a project that would bypass Ukraine as a transit country and expand Russian gas supplies directly to Germany.  The Senate clearly stated its opposition to the gas line “given its detrimental impacts on the European Union’s energy security” and put in a provision that would allow the administration to sanction EU companies involved in any Russian export pipeline (read: Nord Stream 2).

This is a milestone development. It strengthens US resolve on the Russia sanctions and should somewhat ease European worries about Trump going soft on Russia. And it puts further pressure on Nord Stream 2, a pipeline that the majority of EU Member States and the European Commission oppose for obvious geopolitical reasons.

Yet, the tone from Berlin is hysterical. Foreign Minister Gabriel has sharply criticised the proposal. Chancellor Merkel is backing Gabriel on this, albeit via a statement from her press spokesperson. And German Economy Minister Zypries has even speculatively floated the idea of countermeasures against the US in this regard. They consider the US Senate act an offense to the German energy companies in bed with Gazprom and claim the US is shamelessly promoting its own energy interests given its potential for shale gas exports to Europe

What nonsense!

The arguments don’t stand up to any scrutiny. First, US gas export infrastructure ain’t sufficient to make any relevant dent in the EU’s gas imports from Russia any time soon. And second, Asian markets would economically be more profitable for US gas exporters. Europe’s energy security isn’t strengthened by increasing dependence on Russia via yet another pipeline.

What’s actually at play is a kind of Schroederisation of the election campaign.

Gerhard Schroeder, the Socialist former Chancellor of Germany, successfully used anti-American rhetoric in his opposition to the Iraq War to win re-election in 2002.

Having crashed down in the opinion polls, the SPD is desperately clutching at straws, hoping that strong rhetoric against the US will bring them back some dynamic. Chancellor Merkel is aware of that threat and tried to pre-empt it with her speech in Trudering, where she highlighted that Europe can no longer rely on the US. But she too is aware of the pitfalls of going overboard. Hence, why her statement came from the press spokesperson.

The Socialist criticism of the US Senate is comical. It puts the SPD in the same camp as Trump, since his administration had been against these Senate amendments as well. So the SPD is actually supporting Trump now on Russia. You couldn’t make this stuff up.

In a declaration against the US Senate amendments, German Foreign Minister Gabriel and the Austrian Chancellor Kern state that “we decide upon who delivers us energy according to the rules of openness and market competition”, and that geopolitical interests shouldn’t interfere with economic interests. If that’s the case then what’s up with the EU sanctions regime? Aren’t geopolitical interests at play here that interfere with economic interests? Should the sanctions now also be sacrificed on the altar of economic interests?

This whole episode clearly shows again the deep ties that bind the German Socialists to the Russian regime and its energy exports. Gerhard Schroeder, now on the payroll of Gazprom as one of its chief lobbyists, is obviously doing a good job inside his party.

The SPD is known to pursue a traditional Russia policy of Wandel durch Annäherung (‘change through rapprochement’), stating that Russia can be changed through close ties. The problem is that it’s not Russia that’s changing, it’s the SPD akin to Nietzsche who said “when you gaze long into the abyss. The abyss gazes also into you”.

Putin and his regime are masters at network diplomacy, penetrating deep into all kinds of social, economic and political structures. The intermingling of economic, political and private ties, as so highlighted by Gerhard Schroeder is dangerous. It pits personal against national/European interests. Even the Notorious B.I.G. understood this point, when he said in his 10 rap commandments that rule 7 is crucial but “so underrated: keep your family and business completely separated”.

EU Member States opposing the Nord Stream 2 pipeline need to come out swinging in favour of the US Senate, lobby the US Congress and administration in favour of the legislation, and criticise Germany for its position. Pressure on Germany needs to increase in order to deep-six the Nord Stream 2 pipeline.

The Internet of Wild Things: Why EU Cybersecurity makes me wannacry

More than 200.000 computers infected, more than 150 countries affected, a total cost of up to 4 billion USD, and countless hospitals, factories, and services shutdown – that was the result of the worldwide cyberattack known as WannaCry. Putting its direct impact aside, however, the Wannacry attack painfully laid bare the cyber vulnerabilities of our age.

Cyberattacks are by far no longer a niche issue or futuristic material for blockbuster movies like Die Hard 4.0. They’re a daily reality. Last year in Europe, almost 70% of large businesses and half of all small businesses are estimated to have been victims to a cyberattack. And that’s no great surprise. The majority of companies doesn’t even have formal cyber security policies in place. Most worryingly perhaps is that the majority of cyber intrusions focus on a crucial people-oriented sector: healthcare. A recent report into cyber security trends highlighted that almost 20% of all attacks target that particular industry. The WannaCry attack, for example, affected many National Health Service hospitals in England and Scotland. All kinds of devices had been infected, ranging from computers and blood-storage refrigerators to MRI scanners.

The alarm bells have been ringing for some time now and WannaCry was a wake-up call that due to its global reach, finally jolted some into action. Germany, for example, has now stated its intention to update its cybersecurity legislation to include the health care and financial sectors in its list of critical industries that require minimum cybersecurity standards.

The European Union has also been working on its cybersecurity legislation, having put into place its NIS Directive (Directive on security of network and information systems), which must be implemented by the EU Member States by May 2018. This Directive obliges critical institutions and infrastructures to have basic minimum cybersecurity standards.

However, in this fast-evolving brave new digital world, catching-up just ain’t good enough. The pace and extent of digitalisation is so fast and wide that legislation needs to adapt accordingly. That means not just reacting but pro-actively considering and putting into place cybersecurity safeguards for emerging fields.

Digitalisation is a base innovation, similar to the invention of electricity. It is spreading like wildfire into every sector, service and product. Everything is becoming connected. The Internet of Things is a prime example where regular products from coffee machines to baby dolls are being digitised. But our cybersecurity legislation is not taking it into account. These devices don’t need to have any basic cybersecurity standards. As such, the Internet of Things can through cyber-manipulation actually turn into an Internet of Wild Things.

Just last year, a massive cyberattack took control over thousands of internet-connected devices – ranging from cameras, kettles, thermostats and TVs – to then use this “zombie army” of things to take down sites such as Twitter, Spotify and Paypal.

These internet-connected products are often sold as “smart devices”. They’re not. Without basic cybersecurity standards, they’re stupid devices. They open a cyber door into our digital and physical lives. They can be the entry point, allowing someone to cross-over into other digital areas such as your credit card details. They can create vulnerability. As has also been shown in automated cars that have been hacked into and hijacked so to speak.

There’s a large vacuum in this field that needs to be filled. And the longer it takes to fill it, the more vulnerable digital society will become. Because any new legislation calling for basic IT standards on connected devices would arguably only count for new devices sold in the market. But what about all those old smart devices that are already in circulation?

Secondly, there’s another fundamental question to be asked about connected devices. Let’s be realistic: a one-off cybersecurity standard won’t do. Cybersecurity is a non-stop game where software needs to be continually updated and expanded. That was also one of the reasons why so many computers had been infected by WannaCry – they were running out-of-date versions of Windows. How will such a process for updating connected devices be put into place? Is it realistic and would companies want to take on that responsibility? And what will its impact be? Izabella Kaminska, recently asked in an op-ed in the Financial Times what would happen in the case of self-driving cars, if one encounters “the spinning wheel of death (ie. a software update) just when they need to rush to hospital?” Digital systems can have physical effects.

The European Parliament in a recently adopted Report on Digitising European Industry has brought attention to this issue of connectivity. The report raises the issue that “producers are responsible for ensuring safety and cybersecurity standards as core design parameters” and that “cyber security requirements for the Internet of Things…would strengthen European cyber-resilience”. Hear Hear! The European Union Agency for Network and Information Security (ENISA) has also been promoting this issue, highlighting its damage potential.

Basic IT security parameters need to be put into place to ensure the Internet of Things doesn’t turn into the Internet of Wild Things. European policymakers need to move this issue forward in spite of industry moaning. As a first step, they could adapt public procurement rules in such a way that any connected device would be required to have basic cybersecurity standards.

Debating Ethics in the Digital Disruption

We are in the midst of perhaps the largest societal disruption in history. Digitalisation is changing the way we work, consume, communicate, think, live. And this in an incredibly short timeframe. The industrial revolution in the 18th Century took about 80 years. It resulted in mass urbanisation and mass technological, economic, societal, social, environmental, geostrategic and political change.

Digitalisation goes beyond this in many ways. Its change is not only faster, it accelerates life itself. It touches upon every sector and every facet of our lives. It’s revolutionising production, information, mobility, and so on. Autonomous cars, robots, artificial intelligence, automation, social media, are all transformative. They will define us; they will define society. This is the dream of the Silicon Valley pioneers. Harnessing the transformative powers of digitalisation to change society for the better.

This blue-eyed idealism, however, has some dark downsides. We’re aware of the information cocoon, the echo chambers, that our social media builds, which leads to greater social polarisation and extremism. We know that digitalisation impacts attention, memory, empathy and attitude. We know that it will impact the job market. But, we don’t know how it will do so, at what speed and depth, and what its meta-impact will be on our society at large.

Different doomsday scenarios are emerging. In a world of robots and artificial intelligence (AI), Israeli Historian Yuval Noah Harari is already talking of an upcoming “useless class”. A class of humans that will be living in a post-work world with no economic purpose. Principal researcher at Microsoft Research, Kate Crawford, has warned that in a world of rising nationalism AI could be a “fascists dream”, allowing authoritarian regimes an unprecedented amount of command and control. And Sir Mark Walport, UK chief scientific advisor, too has cautioned against the uncontrolled use of AI in areas such as medicine and the law, because AI can’t be neutral. AI is based on humans and human data. That means AI can take on the very inherent biases that we have, magnify them, and then act on them.

All kinds of ethical questions are emerging in this digital disruption. Who will be liable in a crash by an autonomous car or in a surgery gone wrong by a robot? What should be the algorithms used in autonomous cars – drive over and kill the pedestrian if it saves your life in a traffic situation, or crash and kill yourself, saving the pedestrian? What degree of regulation does social media require to combat fake news and hate speech, without impacting freedom of speech? Should robots be banned from certain tasks? Should there be regulation stating that final decisions must still be made by a human rather than by artificial intelligence? Akin to the military rule that a “kill decision” always has to be made by a human. How do we distribute wealth created by robots? And what happens to the workers displaced by robots?

The problem is, as Reinhold Niebuhr noted in his seminal work Moral Man and Immoral Society, that “the growing intelligence of mankind seems not to be growing rapidly enough to achieve mastery over the social problems, which the advances of technology create”. It is high time for a public debate on ethics and digital technology. Leading AI companies are already moving ahead. Facebook, Amazon, Google DeepMind, IBM, Apple, and Microsoft, this unholy alliance of competitors, has already joined hands in a Partnership on AI designed to initiate more public discussion on artificial intelligence. Why would that be? Because it’s about their business. Loss of public trust in these new technologies could significantly affect their business, burning the billions of dollars in research budgets put into AI.

The public discussion should not be for business to shape. Public authorities have leadership responsibility to put this on the political agenda, start this discussion and engage citizens in it. Some progress is taking place. The UK has established a Data Ethics Group at the Alan Turing Institute and the European Commission can also particularly be praised. Together with media partners from 19 EU countries (such as El Pais, The Guardian, Frankfurter Allgemeine Zeitung, Gazeta Wyborcza, etc.) it has launched a massive set of internet consultations, engaging citizens in surveys on the impact of the digital world on jobs, privacy, health, democracy, security, and so on.

We need an ethical discussion on digital technologies to ensure that the safeguards we have in place for the analogue world are also in the digital world. Digitalisation is shaping and defining us. But we need to be the ones that shape and define it. So that it may give us its greatest advantage and the least disadvantage.